BUSINESS
02/07/2014 12:19 EST

Canada Budget Will Target Charities Over Terrorist Links: Flaherty

TORONTO - Jim Flaherty says he will outline plans to curb the link between terrorists, organized crime and charities, as part of the new federal budget due next week.

"There are some terrorist organizations, there are some organized crime organizations that launder money through charities, and make donations to charities," he said during a media conference in Toronto on Friday.

"That's not the purpose of charitable donations in Canada, so we're becoming increasingly strict on the subject. You'll see some more on Tuesday."

The finance minister did not offer specifics on what measures would be taken, but said he's not concerned about suggestions that changing rules for charities would be perceived as a way to silence critics of the government.

"If the critics of the government are terrorist organizations, and organized crime, I don't care," he said.

Flaherty raised the concern during the traditional pre-budget shoe fitting in Toronto, a media opportunity that often provides a preview of what will appear in the annual budget.

Price parity between U.S. and Canadian goods will also be on the agenda next week, he said, as the value of the Canadian dollar continues to slide against the U.S. dollar.

"We have not let that issue go away," he said. "We had the senate committee do some work for us and we are on top of it."

The event was held at Mellow Walk Footwear, a factory in Toronto that makes industrial safety shoes, and is one of the last shoe manufacturers in the country. The family-run business has about 50 employees, said president Andrew Violi.

Flaherty chose steel-toed black wingtip shoes, which he said were "good working shoes for a good working budget."

He slipped them on over a pair of blue, white and green striped socks he joked were his "Conservative socks."

Flaherty told reporters that the budget will encourage economic growth and jobs.

The government is planning to post a surplus in 2015, just in time for the next election. The extra cash would allow them to pay for some long-promised election plums, including income splitting for tax purposes.

Flaherty would not say if he expects the budget surplus in 2015 to be more than the $3.7 billion forecast in November.

"Could be. We'll see. The world economy is still fragile," he said. "As you know, the equity markets were hammered on Monday. We just need to be cautious in what we do."

A report Friday that showed the Canadian economy gained 29,400 jobs in January, after a downturn in December, is expected to bolster Mr Flaherty's position as he prepares to deliver the budget on Feb. 11.

Statistics Canada reported the unemployment rate slid 0.2 percentage points to 7.0 per cent for January, as the number of full-time jobs increased.

But analysts cautioned that the employment trend is still sluggish.

Note to readers: This is a corrected story. An earlier version said the Statscan labour report was released on Tuesday.

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